A CGE model of South Africa is used to find the potential for a double or triple dividend if the revenues raised from an energy-related environmental tax are recycled to households and industry through lowering existing taxes. Four environmental taxes and three revenue-recycling schemes are compared. The environmental taxes are (i) a tax on greenhouse gas emissions, (ii) a fuel tax, (iii) a tax on electricity use, and (iv) an energy tax. The four taxes are constructed such that they have a comparable effect on emissions. The revenue is recycled through either (i) a direct tax break on both labour and capital, (ii) an indirect tax break to all households, or (iii) a reduction in the price of food. A triple dividend is found - decreasing emissions, increasing GDP, and decreasing poverty - when any one of the environmental taxes is recycled through a reduction in food prices.

[1] The South African government is exploring ways to address water scarcity problems by introducing a water resource management charge on the quantity of water used in sectors such as irrigated agriculture, mining, and forestry. It is expected that a more efficient water allocation, lower use, and a positive impact on poverty can be achieved. This paper reports on the validity of these claims by applying a computable general equilibrium model to analyze the triple dividend of water consumption charges in South Africa: reduced water use, more rapid economic growth, and a more equal income distribution. It is shown that an appropriate budget-neutral combination of water charges, particularly on irrigated agriculture and coal mining, and reduced indirect taxes, particularly on food, would yield triple dividends, that is, less water use, more growth, and less poverty.

Abstract

This paper describes the evolution of inventory investment in South Africa over the past two decades, and identifies the factors influencing inventory investment over this period. An econometric model of inventory investment in South Africa, based on the production smoothing approach, is constructed. The results of the model indicate that actual sales, production, unfilled orders, price levels, interest rates and expected sales have an influence on the evolution of inventory investment. These variables are directly or indirectly influenced by macroeconomic policy decisions and through their influence on inventory investment they also influence changes in gross domestic product. Therefore, prior information on the factors that influence inventory investment contributes to explaining changes in gross domestic product and may help to prepare more accurate short-term forecasts of overall economic activity.

Abstract:The impact of the sporting industry on economic decision making has increased dramatically since the global media explosion in the 1980s. Tourism and advertising revenues generated by mega-events such as World Cups or Olympic Games have become a major boost to the economies of hosting nations. In addition, globalisation has placed great emphasis on the importance of Foreign Direct Investment (FDI), especially to developing countries. This paper seeks to examine the impact of the 2010 FIFA World Cup on the South African economy. Using a 32-sector Computable General Equilibrium (CGE) model, the various shocks on the economy, such as infrastructure developments, increased tourism and financing implications, are modelled. Results are shown and carefully explained within the context of the model. It is found that in the short term, there would only be a favourable outcome in the economy should financing be shared between higher present taxes and revenue generated from future economic growth and private investment.

South Africa's unallocated water resources have dwindled to precariously low levels. Furthermore, it is generally recognised by the authorities and specialists alike that it is likely that water demand will outstrip water supply within the next decade. Macro-economically and strategically speaking, the question therefore is how to make best use of the country's available water resources?We ask this question since South Africa is a country classified as having chronic water shortages, a condition exacerbated by climate change and the presence of invasive alien plant species. In this paper we address the question of sectoral water allocation by applying a macro-economic comparative static Computable General Equilibrium (CGE) Model using an integrated database comprising South Africa's Social Accounting Matrix (SAM) and sectoral water use balances. We refer to AsgiSA, the South African Government's Accelerated and Shared Growth Initiative for South Africa, and conclude that introducing the proposed programmes in a business-as-usual and water-intensive manner will strengthen the current growth in the demand for water. This will bring forward, or accelerate, the need for introducing water rationing among sectors.The importance of this conclusion cannot be emphasised enough. Water is essential, and recognised in as much in the preamble to the National Water Act of 1998, with regards to livelihoods, health and from a socio-economic development perspective since there are no substitutes for it. While water rationing is imminent, the reality thereof has not yet led to a rethink of macro-economic policies. This delayed effect can create a degree of comfort and ill-founded complacency leading to non-action, whereas there is an urgent need for proactive measures towards water conservation.

Polioviruses (PVs) are not associated with waterborne transmission to the same extent as many other enteric viruses. However, they are typically transmitted by the faecal-oral route, which implies that the risk of infection by exposure to the viruses in water cannot be underestimated. The risk appears particularly high for rural communities, which use sewage-polluted river water for domestic purposes. Thus, the presence in the environment of highly evolved, neurovirulent vaccine-derived poliovirus (VDPV) strains in the absence of polio cases would have important implications for strategies to terminate immunisation with oral poliovirus vaccine (OPV) following global polio eradication. The aim of the current study was to determine the prevalence of VDPVs in selected sewage and river water samples collected from 2001 to 2003, and to construct phylogenetic trees of the partially sequenced 5′untranslated region (5′UTR) and the VP1 region of the genomes to deduce the genetic relatedness between the PV strains. Using the monolayer plaque assay, 703 plaques from sewage and 157 plaques from river water samples were analysed. Application of a RT-multiplex PCR revealed that 176 of these plaques were non-polio enteroviruses, and 49 were PV isolates. The Sabin-specific RTtriplex PCR revealed the presence of 29 Sabin PV type 1, 8 Sabin PV type 2 and 12 Sabin PV type 3 isolates. The 5′UTR and the VP1 region of 13 PV type 1, 7 PV type 3 and 6 PV type 2 isolates were partially sequenced. The majority of the OPV isolates (24 out of 26) displayed close sequence relationships (>99% VP1 sequence identity) to the parental Sabin PV vaccine strains and were classified as "OPV-like viruses". Two isolates (D1 08/28 and OF1 05/21) were found to be highly divergent and were classified as "suspected" VDPVs. Isolate OF1 05/21 (a "suspected" VDPV type 1) showed more than 0.9% divergence in VP1, whereas isolate D1 08/28 (a "suspected" VDPV type 2) showed 1.4% divergence in VP1 from the parental Sabin PV vaccine strains. As with most of the other OPV-like isolates, these "suspected" VDPVs were carrying mutations, which have previously been associated with reversion of the attenuated Sabin PV strains to increased neurovirulence. It was estimated that the total period of replication for the two "suspected" VDPVs was between 12 and 16 months. In conclusion, this study provided new and relevant information on the prevalence of "suspected" VDPVs in sewage and openUP river water, and opened the way to assess the possible broader significance of the findings reported here.

In this paper we measure the economy-wide impact of the 2014 labour strike in South Africa's platinum industry. The strike lasted 5 months, ending in June 2014 when producers reached an agreement with the main labour unions. The immediate impacts on local mining towns were particularly severe, but our research shows that the strike could also have long lasting negative impacts on the South African economy as a whole. We find that it is not the higher nominal wages itself that caused the most damage, but the possible reaction by investors in the mining industry towards South Africa. Investor confidence is likely to be, at least, temporarily harmed, in which case it would take many years for the effects of the strike to disappear. We conduct our analysis using a dynamic CGE model of South Africa.